We recently published a list of the 20 Best Dividend Growth Stocks with High Yields. In this article, we are going to take a look at where The Hershey Company (NYSE:HSY) stands against other best dividend growth stocks.
Dividend-paying stocks have been gaining popularity among investors due to their long-term advantages. According to Jeremy Zirin, who leads the US equity team for private clients at UBS Asset Management, companies with a consistent track record of increasing dividends are a smart choice for investors seeking a balanced approach in the current market environment. When markets dipped in April after President Donald Trump announced new tariff policies, investors gravitated toward high-yield dividend stocks. However, as trade tensions began to ease and negotiations progressed, markets recovered. Stocks surged particularly after the US and China agreed to temporarily reduce tariffs. He made the following comment about dividend stocks:
“The higher-dividend-yielding strategies tend to do better when markets are in real turmoil and declining, but if there’s more chop, more volatility and potentially upside … you don’t want to be overly defensive.”
Historically, companies that consistently increase their dividends have tended to be less volatile and often delivered stronger returns than the broader market, including benchmarks like the S&P Equal Weight Index. According to a report by Guggenheim, from May 2005 through December 2024, firms that either initiated or raised their dividends generated an average annual return of 10.5%. In contrast, companies that cut or suspended their payouts posted just 5.5% annually. The overall market returned 10.4% during this timeframe, slightly behind the dividend growers. The report also highlighted that dividend growth strategies have historically performed well in both rising and falling markets, making them an attractive option for investors focused on long-term gains and downside protection.
According to a report by S&P Global, the growth of global dividend payments had been slowing since the post-COVID recovery, but that trend reversed last year. In 2024, the growth rate unexpectedly accelerated to 8%, with shareholders receiving approximately $180 billion more than the previous year. This increase came as a surprise given the persistent geopolitical and economic challenges. The report also highlighted that several sectors and regions saw record dividend initiations, including the US technology, media, and telecom (TMT) sector, banks in Italy and Spain, Japan’s automotive industry, and a general rise in payouts from Mainland China. Even with extreme price fluctuations, dividend payments from the oil and gas sector remained strong. Looking ahead, the report suggested that this high level of dividends is likely to hold steady, with global payouts expected to remain at $2.3 trillion in 2025.
With growing investor appetite for dividend-paying stocks, many companies have responded by gradually increasing their dividend payouts. A report by Janus Henderson revealed that global dividend payments reached a record $1.75 trillion in 2024, reflecting a 6.6% rise on an underlying basis. The overall growth rate came in at 5.2%, slightly held back by a drop in special one-time dividends and the effect of a stronger U.S. dollar. Out of the 49 countries covered in the report, 17—including major economies such as the US, Canada, France, Japan, and China—posted record-high dividend levels. In total, 88% of companies either raised or held their dividends steady over the year.
A close-up of hands deftly moulding a bar of chocolate.
Our Methodology
For this list, we screened for dividend stocks with yields higher than 3% as of May 13. From this group, we further refined our selection criteria by identifying stocks with a dividend growth streak of 10 years or more. The stocks are ranked in ascending order of their dividend yields.
At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
The Hershey Company (NYSE:HSY)
Dividend Yield as of May 13: 3.21%
The Hershey Company (NYSE:HSY) is a Pennsylvania-based multinational confectionery company that is known for its chocolates, snacks, and pantry items. The company faced near-term challenges from reduced calorie consumption due to Ozempic and rising cocoa costs from poor harvests. The stock has declined by over 22% in the past 12 months. However, its long-term outlook remains stable thanks to diversified product offerings and pricing power to offset higher input costs.
In the first quarter of 2025, The Hershey Company (NYSE:HSY) reported revenue of $2.8 billion, which, though, fell by 13.7% YoY, beat analysts’ estimates by $11.9 million. The EPS of $2.09 also beat consensus by $0.16. The company’s quarterly consumption surpassed expectations across both its US Candy, Mint, and Gum segment and its Salty Snacks category, fueled by strong seasonal demand and the continued success of products like Dot’s and SkinnyPop. Although cost pressures remain elevated, management emphasized that the company’s solid balance sheet provides the flexibility to invest in growth initiatives and pursue recent strategic acquisitions, which enhance its better-for-you offerings and support long-term value creation.
The Hershey Company (NYSE:HSY) ended the quarter with over $1.5 billion available in cash and cash equivalents, up from $730.7 million at the end of December 2024. It is one of the best dividend stocks on our list as the company has raised its payouts for 15 years in a row. Currently, it offers a quarterly dividend of $1.37 per share and has a dividend yield of 3.21%, as of May 13.
Overall, HSY ranks 18th on our list of the best dividend growth stocks with high yields. While we acknowledge the potential of HSY as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than HSY but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the dirt cheap dividend stock.
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Disclosure: None. This article is originally published at Insider Monkey.
